Parallel Pipeline Project: Controversial dispute between AMC and Company ends after one decade!

The controversial parallel pipeline water project, which was in the news for last one decade, seems to have been closed forever by Aurangabad Municipal Corporation (AMC) as the contractor withdrew its plea from the Supreme Court as well as the arbitrator, it is learnt.

Earlier, the AMC paid Rs 29 crore to the company which then withdrew its petition from the Apex Court. The company also took back its plea lying pending before the arbitrator - appointed to settle the dispute. Notably, the AMC had spent crores of rupees in this legal battle.

As reported earlier, the project was sanctioned on public, private and partnership (PPP) mode in 2009. The AMC signed an agreement with the original company. The water project of valuing Rs 792 crore got started from September 1, 2014. Later on, the original company appointed Aurangabad City Water Utility Company Limited (ACWUCL) as its special purpose vehicle (SPV) to implement and execute the water project. However, the agency failed to complete the project as per the milestones mentioned in the agreement. There was a delay in laying of the main pipeline between Jayakwadi Dam and the city. The agency focussed on the city water distribution system. Later on, the AMC scrapped the agreement in 2016 stating that the company had failed to work satisfactorily in the last two years.

The company challenged the decision before an arbitrator. It also filed a special leave petition (SPL) in the Supreme Court. The company demanded Rs 130 crore from AMC. Later on, it asked the state government to direct the AMC to pay Rs 29.67 crore (as an interim negotiation amount). Hence, the state Urban Development Department issued an order to AMC to release the money.

Accordingly, the municipal commissioner paid the money to the water contractor, some eight months ago. Hence, the company withdrew its plea from the Apex Court, and now it withdrew its plea from the arbitrator. The issue is settled once and for all for AMC, said the sources.